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6/06/2011 @ 8:43AM15,927 views

Building Successful Non-Profit Boards

The possibilities of the boardroom, board director Lucy P. Marcus believes should aspire to the ideals that legendary medieval English King Arthur created at his infamous table. There, knights gathered in effort and equality to erect a vast empire that changed history.

Change is one of the incentives driving individuals to join boards. Armed with good will and intentions and a collection of applicable skills to help entrepreneurial ventures, multinational corporations and non-profits catapult to success. It is this intention that has taken New York-born and UK-based Marcus to throw her passion behind sitting on boards as well as writing about best practices for boards and advising entrepreneurs, corporations and non-profits on how to develop strong boards. Board development, Marcus notes, is surprisingly something many entrepreneurs, who are so focused on their respective innovations, treat as an after thought. The situation is similar at non-profits. As a life-long member of this field, that caught my eye.

“People need to think of non-profit board seats as a deep responsibility and a job that requires due care and attention,” Marcus says. She believes this because at a non-profit there is so much at stake. To begin, the very cause of the organization is at stake as is its survival. That’s a higher ethical imperative than just ensuring the health of the organization’s bottom-line. “A non-profit board is looking after the governance of the organization and safeguarding its mission,” Marcus says, and that “as a board member I feel this responsibility even more keenly as it is even more critical in difficult economic times and where headlines are creating doubts in the minds of donors and stakeholders.”

Ironically, though they don’t generate revenues, bottom-lines are just as important to non-profits as they are to for-profits. Their sustainability is dependent on it. Hence, Marcus points out, many are compelled to elect board members without serious thought to all the things board members can bring to a boardroom. Unlike for-profit boards where members get compensated, non-profit boards, particularly in the U.S., require members to fundraise on behalf of the organization. This is good and bad.

Fundraising is good where you can find a person to sign on to a non-profit’s mission and campaign on its behalf. Causes rarely make any difference without momentum. The need to raise cash for an organization provides a useful anchor to gain backers. Yet, the need to fundraise also runs the risk of building a board that is focused only on numbers and not the governance or long term development of the organization.

Marcus points out that there is “real value to having different skills” on non-profit boards. Whether in finance, marketing or human resources, individuals asked to join a non-profit board should bring added value to the institution – and its staff. Because the majority of non-profits bootstrap their operations, taking care to “minimize overhead,” they often make do with a small staff that is expected to juggle several responsibilities, none of which few are experts in.

Non-profit board members can provide mentoring to an organization’s staff, “a powerful value-add,” Marcus notes. Matching the skills of board members to staff and mentoring is something that should be part of non-profit board member’s responsibilities. Interestingly, Marcus points out that they are responsibilities rather than obligations. Serving on a non-profit board, she says, is a privilege and opportunity to be involved in something significant. By mentoring staff, a non-profit board member gets the chance to see the inner workings of the outfit, add value to the operation, and at the same time establish good will among a team.

The launch of a non-profit is another interesting aspect – and challenge, of building a non-profit board. Unlike established Fortune 500 companies that hire and fire CEOs, non-profits, like start-ups, exist because of a particular individual. Marcus notes that there is a delicate balance to be had between the CEO and the board. The challenge is ensuring that the board does not see this individual as infallible or as a secretary. In recruiting for board members, Marcus says, that both the CEO and the potential member recognize this. A non-profit CEO must “execute on a plan that they can be held accountable for,” and a board member must not micromanage on that execution, but still must keep a close eye on the governance of the organization.

How to recruit for a non-profit board and have a successful boardroom? Marcus has these handy suggestions:

Be sure you are building a board with the right task in mind. Boards have multiple roles, from fundraising to caretaking, governance, and oversight. Just like any company or corporation, it is important to do an assessment. Understand the skills that your particular non-profit needs to fulfill your mission.

Choose people who understand your mission and who understand the value they bring is beyond their checkbook.

Don’t overload the board with names. Choose a manageable number of individuals that will be genuinely active and contribute in a concrete manner. Not every person who donates money, even sizable amounts, should automatically be given a seat at the board table. Creating an advisory group or some other way to honor and engage people is useful.

Make sure there is financial acumen built into the board. Ensure there are people who understand the audit committee, as this is vital for keeping track of an organization’s performance and integrity. Separately, financial planning and strategic planning are critical to a non-profit’s current and long-term health.

Ensure that the board member is eager to engage with the organization and lend their expertise. Outline expectations and responsibilities up front.

Have at least one genuinely independent member. It is helpful to have some people in the room who are neither donors nor beneficiaries and bring true independence to the discussion and oversight role of the board.

Make sure people are coming to the board for the right reasons. Belief in the cause and a genuine interest in helping build a strong organization to address the non-profits cause. The individual’s commitment to the organization, not reputation should be deciding factor. By the same token, you want to make sure your objectives are in alignment and that both parties feel assured that their activities won’t taint one another.

Identify a mix of individuals that have previously served on boards who will come in with experience with the boardroom with those who are new to the boardroom. Mixing those with experience with those who have not served on a board can marry best practice with enthusiasm and a desire to learn and contribute to the board.

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